The higher costs of gasoline and housing will color your view of investing
A roof over your head and gas in your tank cost more than ever. But prices for these essentials color your view of investing.
What do your nest egg, retirement planning and personal finances share with the overall American economy? Plenty, especially when it comes to the bite from energy and home prices.
In 2021, gasoline and heating/cooling costs continue to gobble up family income, exacerbated by a red-hot housing market. Both can leave Americans feeling uncertain about their economic prospects.
Rising Gas Prices
According to the American Automobile Association, as of May 12th, the national gas price average jumped six cents to $2.96 and another increase of 3 more pennies would make the national average the most expensive since November 2014 – the last time we saw average gas prices close to $3.00.
And expectations are that gasoline prices will continue trending up, especially since the shutdown of the Colonial Pipeline, which delivers approximately 45% of all fuel to the East Coast. In fact, many are predicting an increase of at least 10 cents a gallon and we are starting to see long lines at the pump.
Rising House Prices
According to the National Association of Realtors, the median existing-single-family home sales price jumped 18.4% to hit a historic high of $334,500, with all 4 regions of the country posting double-digit price gains.
- The median price in the Northeast was $364,800, up 21.4% from March 2020.
- The median price in the Midwest was $248,200, a 13.5% increase from March 2020.
- The median price in the South was $283,900, a 15.6% climb from a year ago.
- The median price in the West was $493,300, up 16.8% from March 2020.
What Should You Do?
Housing and gas/fuel costs seriously affect our economic well-being, as housing accounts for more than 13% of our GDP while America’s oil and natural gas industry account for about 8%.
Your optimism fuels your desire to invest and commit to investments – especially in our recent rollercoaster market. Before you send money toward Wall Street, ask yourself these key questions:
- How do you feel about the economy and your own financial prospects?
- Are you more confident than a year or two ago?
- How’s your mindset affecting your spending and investing?
The answers to these questions will impact how you currently invest.